No one likes failure. We are constantly told not to give up and to keep on trying no matter what. But sometimes this might not be the best advice or idea.
In business, pursuing a lost cause will only result in more losses. Sure, there are miracle stories out there. But what are the chances that your struggling business who has been operating at a loss for more than 2 years now will be one of them? To be brutally objective and honest, the chances are very slim or close to none.
So how do you know you are better off putting your startup out of its misery? You can watch out for the following signs.
1. Too many losses
The reasons for this could be because of internal or external causes. Internal causes has something do with your business operations. Examples of this are poor product marketing, high operating expenditures, and a bad business model. These are causes that you can do something about provided that it is not yet too late.
On the other hand, external causes of loss are those that are outside your business operations and has something do with your business environment. Change in market demand and strong competition are examples of external causes. Unlike internal causes, you cannot do anything to change external causes. The only thing you can do is to adapt to them.
During the startup phase of your business, it is understandable to incur losses since you are still settling in. But if you have been operating at a loss for a long period of time despite all the adjustments you have made both internally and externally, then this is a real problem. Too many losses despite all your attempts to fix it could be a sign that it is time to throw in the towel and give up the fight.
2. You do not know where you are headed
It’s not always about losses. Your business could be operating comfortably with a small margin of profit yet has been the same way since you started it. You have tried to shake things up and seek opportunities for expansion but to no avail. In other words, your business is not growing or going anywhere.
It could be any of those internal or external causes we mentioned. Or probably your business idea is just not clicking with the market. Whatever the reason is, having no clear direction is a sure sign of stagnation. And if your business stagnates, you will eventually get beaten up by stronger competition and will have to someday close down.
3. There are better opportunities out there
Is there a new business idea that you think would fare better and want to try? Or do you have an employment opportunity that pays better than what your business is earning you? When presented with a promising alternative and it is impossible to keep both your business and the new opportunity, choose the one which will allow you to grow personally or financially.
You do not have to stick it out until the end. You are not a captain of a sinking ship. If a lifeboat in the form of better opportunities becomes available to you, do not hesitate to jump immediately and save yourself.
4. You no longer want to continue
We have talked about how passion is very important in starting and maintaining a business before. It is one of the foundations of your business. Without it, no amount of profit will make you want to stay and continue. If you feel that the startup life is just not your cup of tea, you do not have to force yourself to drink it.
Unless your business is your only source of income, there is no reason for you to spend time and effort on something you do not enjoy doing. You cannot afford to be half-hearted in doing business. This will only result in stagnation which will kill your business just the same in the long run.